Treasury Secretary Bessent uses hedge fund tactics in joint US-Japan yen intervention

Published Aug 4, 06:42 PM UTC

U.S. Treasury Secretary Scott Bessent, a former hedge fund manager who famously shorted the British pound and yen, has orchestrated the first joint U.S.-Japan currency intervention since 2011 to prop up the yen. The move, buying yen with euros, surprised markets and drew criticism for not addressing Japan's fiscal issues. Bessent's deep understanding of yen dynamics, from decades of trading and over 50 visits to Japan, gives him credibility. The intervention also serves U.S. interests: Japan holds $1.1 trillion in U.S. Treasuries, and a yen-supporting intervention prevents Tokyo from selling those bonds, which would spike U.S. interest rates as national debt nears $40 trillion. Analysts note Bessent takes risks other Treasury secretaries would not, leveraging his macro trading instincts to manage both currency stability and debt financing.